May natural gas is expected to open 3 cents lower Monday morning at $3.07 as market fundamentals and now technicals portend lower prices. Overnight oil markets rose.

Risk managers continue to look for spots to initiate short hedges. “We still feel natural gas could continue lower because of flat demand,” said Mike Devooght, president of DEVO Capital, in a weekend report to clients. “There is still some buying in natural gas on the market on moves lower as expectations for a warmer than average summer still loom.

“On a trading basis, we still continue to look for the market to run out of steam at current levels. We think there is a good chance that we could test the lows of late February [$2.50s] in the next few months. We will hold current short positions for producers and will look at rallies to the $3.40-3.50 range for the balance of the year as a selling opportunity.”

Forecasters see a mixed picture going forward. “The forecast since Friday and Sunday’s reports trends cooler, with these changes focused in the Central U.S. where more intense below normal coverage is seen in the Rockies, Plains and parts of the Midwest,” said MDA Weather Services in a morning six- to 10-day outlook.

“The Midwest sees a mixed period overall, with lower confidence here being attributed to model struggles in resolving the placement of frontal boundaries over the region, especially in the early half. Downstream, the Mid-Atlantic and coastal New England average the period in the much above normal category, with temperatures peaking here early before turning more seasonal late.”

Tom Saal, vice president at FCStone Latin America in Miami, in his work with Market Profile expects the market to test last week’s value area at $3.201 to $3.133.

In overnight Globex trading June crude oil rose 31 cents to $49.93/bbl and June RBOB gasoline gained fractionally to $1.6477/gal.